Shares of Ubiquiti (UI 1.07%) have popped today, up by 20% as of 12:55 p.m. EST after the company reported better-than-expected earnings. The results utterly demolished consensus estimates.
Revenue in the fiscal first quarter increased by 47% to $473.5 million which blew past analysts' expectation of just $314.3 million in sales. That translated into adjusted net income of $157.1 million, or $2.47 per share, which was also significantly above the $1.45 per share in adjusted profits that Wall Street was modeling for.
The networking technology company posted strong growth in both of its main product segments. The service-provider segment saw sales jump 36% while the enterprise business grew by over 52%. That helped expand Ubiquiti's gross margin from 46.8% a year ago to 48.2%. Ubiquiti declared a dividend of $0.40 per share that will be payable to shareholders of record as of Nov. 16. The company also repurchased over 600,000 shares of stock during the quarter at an average price of $162.10.
Ubiquiti did not provide any guidance for the fiscal second quarter but noted that it continues to face supply-chain disruptions from the COVID-19 pandemic. The company's suppliers are having a hard time manufacturing or sourcing key components, which is resulting in higher logistics costs for Ubiquiti. The situation started to improve during the quarter, but Ubiquiti warns that the challenges have not been fully resolved yet and may potentially impact future results.